Gold has long been one of the oldest forms of money. For millenia gold has been treasured by the wealthy, and those wanting to be wealthy. Only in the 20th century did gold fall out of favor as a primary form of money as most of the world stopped using gold coins as a currency.

Many countries, including the U.S., make legal tender gold coins meant primarily for collectors and investors but not meant for general circulation.

It's generally accepted that the first American gold coin was struck by Ephraim Brasher sometime around 1784. The U.S. Coinage Act placed the countries monetary system on the gold and silver standard in 1792 which defined the dollar. Gold coins in various denominations, sizes and weights were part of daily use in American life until 1933. Each coin was literally worth its weight in gold.

All U.S. gold coins were declared illegal for private ownership in 1933, with some exceptions, and the Federal government demanded their return to the treasury where they were melted into gold bars. It wasn't until 1973 that the ban on private ownership of gold was overturned and since that time the trade in gold coins both for numismatic interest and investment has skyrocketed.

While some gold coins trade for tens of millions of dollars because of their rarity it is possible for most collectors to own American gold coins minted prior to 1933 at little more than their melt value. The $10 Eagle and $5 Half Eagle in Liberty Head or Indian Head in brilliant uncirculated condition are affordable.

Without doubt the most recognized, if not most popular, of American gold coins is the $20 Saint Gaudens Double Eagle. Designed by Augustus Saint-Gaudens at the request of then President Theodore Roosevelt the $20 Saint Gaudens Double Eagle was minted from 1907 to 1932. Highly sought after, high mint state examples of the coin have sold for millions, but amazingly, certified AU-55 through MS-62 examples can be had for a small premium over melt value.

If you are new to collecting coins it is wise to understand that counterfeits of gold coins do exist. In order to protect your investment it's recommended that you purchase coins that are guaranteed genuine or are certified by the third party certification services NGC (Numismatic Guaranty Corporation), PCGS (Professional Coin Grading Service, ANACS (American Numismatic Association Certification Service) or ICG (Independent Coin Grading Company).

What's the difference between bullion coins and numismatic coins? Bullion coins have a value based on their precious metal content, primarily gold or silver, but in some case platinum or palladium. Their prices are tied directly to the always fluctuating gold and silver commodities market. Numismatic coin values, whether they contain gold, silver, nickel, copper or other metals, are primarily based on condition, scarcity and demand. Rare numismatic coin values do not depend on the changing price of the gold and silver commodity markets.

For those looking to use gold as a hedge in their investment portfolio there are the new American Eagle gold coin series available in $5 (1/10th oz), $10 (1/4 oz), $25 (1/2 oz) and $50 (1 oz) denominations. The trade of precious metals like gold and silver bullion is always volatile, subject to high peaks and deep lows. Buying gold bullion is not for the faint of heart.

The way to smooth some of the volatility, though, is to purchase pre-1933 American gold coins in certified mint state form. Whether you choose American gold coins as an investment or as a collectible they are fun to acquire. The older gold coins certainly have a history to tell about the U.S., its growth and rise to world power.